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S&P to review South Africa's credit rating

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EM stocks down 0.1%, FX off 0.2%

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Both indexes set for weekly gains

By Shashwat Chauhan

May 17 (Reuters) - Most currencies in emerging Europe

edged lower on Friday as optimism that the U.S. Federal Reserve

will start cutting interest rates soon appeared to taper off

following cautious comments from policymakers.

Hungary's forint lagged local peers, falling 0.4%

against the euro, while the Czech crown held steady at

24.69 per euro, hovering near a four-month high.

Romania's leu was last trading at 4.97 per euro,

while Poland's zloty slipped 0.3%.

"The increasing risk appetite driven by expectations

regarding the interest rate development in the U.S. is a

positive factor for the local currencies," Erste Group analysts

said in a note.

"Further, relatively hawkish stance of central banks in the

region and solid economic growth also favour appreciation

against the euro."

EM assets, generally regarded as risky, have flourished

after data earlier in the week showed U.S. consumer prices

increased less than expected in April, bolstering hopes that the

Federal Reserve could kick-start its policy easing cycle as

early as September.

However, while data this week offered the Fed good news on

two fronts, policymakers haven't openly shifted views yet about

the timing of rate cuts which investors are convinced will start

this year.

Turkey's lira was last trading at 32.29 per

dollar, while the local stock index jumped over 1%.

South Africa's rand edged 0.1% lower against the

dollar, hovering near a five-month high ahead of S&P Global's

review of the country's sovereign credit rating.

Johannesburg shares slipped 0.6%, while most

bourses in Central Eastern Europe turned lower, with Hungarian

shares down 1.1%, while stocks in Warsaw dipped

0.9%.

As of 0830 GMT, MSCI's index for emerging market stocks

edged 0.1% lower, while stocks slipped

0.2%, both on track for their fourth successive weekly gain.

Chinese bourses closed over 1% higher,

with property-related stocks jumping after Beijing announced

"historic" steps to stabilise the crisis-hit property sector,

allowing local governments to buy "some" apartments, relaxing

mortgage rules and pledging to deliver unfinished homes.

EM debt saw inflows of $500 mln in the week to Wednesday,

while equities saw outflows for the second straight week, Bank

of America data showed.

HIGHLIGHTS:

** China's factories fire up but consumer slump persists

** Argentina posts fourth month of fiscal surplus under

Milei, but margin narrows

** Slovak PM Fico between life and death after shooting,

Hungary PM says

For TOP NEWS across emerging markets

For CENTRAL EUROPE market report, see

For TURKISH market report, see

For RUSSIAN market report, see